A Comparative Analysis of the Chinese and the US Financial System and Its Regulatory Environment

René W.H. Linden () and Piotr Łasak ()
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René W.H. Linden: The Hague University of Applied Sciences
Piotr Łasak: Jagiellonian University

Chapter Chapter 2 in Financial Interdependence, Digitalization and Technological Rivalries, 2023, pp 9-21 from Springer

Abstract: Abstract The Chinese and the US financial markets represented totally different models of financial systems until the early twenty-first century. While the US financial market was deregulated, market-oriented, and developed, the Chinese market was more regulated, bank-based, underdeveloped, and subject of a strict state control. After the GFC the Chinese financial market is undergoing a major transformation and has gradually changed from indirect to direct financial intermediation of the real economy. The transformation takes place in the context of coupling between the Sino-US financial systems and the competitive economic decoupling of these economies. The financial markets’ development is a derivative of the regulatory environment. While the US market was subject to deregulation in the decades prior to the GFC, the Chinese financial market remained rather traditional with the sole purpose to support the development of the Chinese economy. After the crisis, the US financial markets are subject to many regulatory reforms aimed at providing more safety for the US and the global financial system. At the same time, the Chinese financial market is subject to a greater state control, aimed at further economic stimulus and achieving goals such as poverty alleviation and financial inclusion.

Keywords: Economic decoupling; Financial coupling; Financial system; Financial regulation; Sino-US economic relations (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-27845-7_2

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DOI: 10.1007/978-3-031-27845-7_2

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